Assume a firm utilizes the security market line approach to determine the cost of equity....
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Accounting
Assume a firm utilizes the security market line approach to determine the cost of equity. If the firm currently pays an annual dividend of $2.40 per share and has a beta of 1.42, all else constant, which of the following actions will decrease the firms cost of equity?
a) a decrease in the risk free rate
b) a decrease in the dividend amount
c) an invrease in the market rate of return
d) a decrease in the firms beta
e) an increase in the dividend amount
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